We had the bottle to grow for it

Let’s Grow has helped companies in a range of exciting sectors, including one County Durham company which has built an international reputation. Peter Jackson reports.

It began as a husband and wife operation run from an office above the library in the County Durham village of Lanchester. Now Lanchester Wines is a group of companies which has become a major player internationally in the bottling and wine importing industries.

According to Mark Satchwell, managing director of one of the group companies, Greencroft Bottling Company, it is now one of the largest bottlers of wine in the world and the second largest in the UK, packing, on average, around 2.5 million bottles a week. “And we would hope to see that grow by as much as 40% over the next 18 months,’’ he adds.

As a contract bottler of wine, Greencroft’s serves other companies in the group, such as Lanchester Wine Cellars and Lanchester Wine Sales as well as 44 external customers, whose wine comes in road tankers for bottling. These range from major international brands such as Australian Vintage, Sileni, or Wither Hills to small own-label customers.

“It ranges from tens of millions of litres down to customers that probably only pack maybe three or four tanks a year,’’ says Satchwell.

Now the group has an annual turnover of around £80m with up to 450 employees. Greencroft Bottling accounts for about half the group turnover and about 60% of the workforce. This makes Lanchester Wines a major player but it has ambitions to be even bigger.

“We bottle, on average about 2.5 million bottles a week and we would hope to see that grow by as much as 40% over the next 18 months,’’ says Satchwell. The business plans to expand its site on the Greencroft Industrial Estate in Annfield Plain, County Durham. The new site, adjacent to the old one, will be some two and half times larger and work will begin this year for completion next year.

“That will enable us to look at other types of product to pack and it should create between 50 and 100 jobs,’’ he adds.

More of its bottles are destined for European markets and the development of Teesport is “hugely important’’ to Lanchester Wines, which, as a group, is ready to take advantage of opportunities for growth as they present themselves. We have a relatively small board, a board that has experienced significant growth,’’ says Satchwell. “And we are always open to new ideas. That said, ideas have to go through the filtering process and due diligence but, if we feel it’s something that fits with what we do or might serve part of the group then I’m sure that a new idea may well be given wings.

“But now the projects are certainly becoming larger and so associated investments and risks are also much larger than they were 10 years ago.’’

The Lanchester Group is a collection of associated companies controlled by one main board. The principal shareholders are founder Tony Cleary and his wife Veronica.

Greencroft Bottling was set up in 2003. Other group companies are Lanchester Wines, Lanchester Gifts, Lanchester Energy and Lanchester Properties. Since the original business, Lanchester Wine Cellars, was set up in 1980 - as a wine merchant and wholesaler supplying the on and off trade in the North East - its growth has been phenomenal. It developed a range of drinks and wines over the years to be contract packed by others.

A 40,000 sq ft bonded warehouse was established in Philadelphia in County Durham and the company’s offices were above the library in Lanchester. “At that stage the business learned all of the processes surrounding bonding goods, holding things in duty suspense, et cetera, et cetera,’’ says Satchwell.

By the late 1990s the business was turning over about £7m a year. In 2000 the entire business was moved to its present site on the Greencroft Industrial Estate, occupying 80,000 sq ft. Three years later the bottling plant was set up. It also acquired a business which produced the 187ml miniature wine bottles which are used by airlines from a company in Lancashire which had gone into administration. At about the same time the business was bottling single malt whiskies for export to Taiwan.

“It was on the 187s that we created our reputation for quality,’’ says Satchwell. “It’s always been a case of putting quality first and you work on your efficiencies thereafter and hopefully you end up with a quality product that’s being delivered at the right price. If you get those two things right, success follows.’’

And follow it did. The business grew and in 2005 started packing some branded products for Australian producer McGuigan Wines in the 187 format. “Effectively we just grew our volumes and doubled almost every year,’’ says Satchwell. “The success of the bottling plant enabled the whole business to move forward.’’

It moved into the gift business, supplying wine and food gifts and hampers to internet based and high street retailers. Now it creates around 500,000 hampers a year and last year it acquired another gift business, Spicers of Hythe, a long established business that supplies customers such as Harrods.

Further investment saw the installation of wind turbines on the Greencroft site making it self-sufficient in electricity and in recent years the group has acquired a further 500,000 sq ft of warehousing space at three sites in Gateshead, at two of which it is installing ground source heat pumps. The business’s growth has been impressive but success was never guaranteed.

Satchwell says: “In the time we have been in business we have seen several large plants created in the UK and, at the same time, we have seen numerous businesses fail at what we do in terms of contract bottling wine.

“But, there has been this commitment to investment, not only in plant but also in people and training and it’s that continuous investment and continuous improvement that has driven the business.’’

That investment was helped in April 2014 by the Let’s Grow programme. A grant for £800,000 was given as part of a total investment of more than £4.1m for new bag-in-box line, new filling lines and a blending plant creating 75 jobs.

“It’s great to get something back,’’ says Satchwell. “If you do put money in the right hands it can create wealth for others. It really does pay for bells and whistles and we have some great kit here now. It was very difficult when we started. What we now spend on a single labeller was our total initial investment because we didn’t have the money and possibly we started smaller than we should have done.

“But, I walk around the warehouses now and by the end of this year we’ll have in excess of a million square feet of warehousing. It’s absolutely phenomenal the amount of wine that moves through this place.’’

Phil Sly of BE Group, which administers Let’s Grow, says: “It was great to have been able to assist Greencroft Bottling/ Lanchester wines with a Lets Grow grant for their project. It has been fantastic to see their plans unfold, they have invested in growth of the business and have increased their production and packaging capacity which has ultimately led to the creation of a large number of jobs in the area.

“It really is an impressive sight to see the factory in operation and to see what has been invested in and how Lets Grow has supported them defines what the grant scheme is all about.’’